In and around 1995 the term e-commerce was being used extensivly to describe the new emerging electronic or digital or online business as it was then, carving our a difference between 'normal' and 'new' commerce. Now, arguably, its just commerce, business is now done digitally - its business as normal. It has taken 20 or so years to transform and invent large swaths of business on to and through e-commerce and digital platforms, business is now online e-commerce is not just commerce.
Today we are not just talking of changing business we are now changing the whole Economy (the complete wealth and resources of a country, especially in terms of the production and consumption of goods and services). The sharing economy and gig economy are starting to define this change, peer2peer services and platform businesses. These terms are often confused but essentially they are similar when thinking of the road map of change to the economy - we will use the Sharing Economy to cover this emerging and new digital drive, asking the question 'when will the sharing economy become The Economy?'
The sharing economy is still only a small part of the overall economy. However more and more it is increasingly becoming seen as simply part of “the economy” and this points to the ultimate sign of the sharing economy’s success and progress into the general way companies and businesses think about how to set-up, change and grow.
2019 will see the first sharing economy IPOs. Lyft and Uber have filed to go public, Uber is valued at $120bn and Lyft at $15bn. Just as in 1997 Amazon went public, this is the first signs of acceptance. Although, as we have seen with Amazon, there are many ups and downs!
There are issues to be addressed as the changes to work practices ripple though the economy. Do we focus on responsible business, do we allow the workforce to choose? Or do we leverage the opportunities in platform power? Do we arrest the power from the platforms or do we allow platforms to pressure their workforce through the app?
Many institutions and the society at large still focus on defining people by one job and a career, whereas the sharing economy encourage many income streams and jobs with all the inbuilt flexibility for the person, making defining the person difficult today for banks and others. Changes to ownership and work structures that reflect the reality of today’s workforce, particularly in the people driven gig economy, are much-needed to address how the wealth distributed.
There is much discussion over exploitation of the worker, but this needs to be thought of differently as more technology moves in offices and factories, through blue-collar and white-collar jobs. People need to think of the all the opportunities. Companies (platforms) must be encouraged to distribute the ability to create wealth though platforms, not just exploit the worker and drive their income down as competition grows.
Think of a family who generates its power through solar and wind, storing and selling excess. They have 1 or 2 autonomous vehicles that they use and when not in use are sent to the grid to earn income. The children do dog walking via an app and care for an elderly friend giving social visits. They grow their own food in vertical gardens, again selling the excess locally when its available. The adults earn income by bidding for different projects that take a day or a few weeks to complete. Their main interest is music and they write their own and sell access to it building up a good following. The family profile is closely held and the data and metrics are managed, being sold as their own income to large corporations, advertising agencies and universities to complete research. This is not explotation, this is a new way of 'working' or living.
The rush to scale the sharing economy in some parts of the world is unprecedented. In China, the government wants it to account for 10% of national GDP by 2020, a huge change and one that we have seen many times China complete in the past 30 years. Governments need to provide leadership.
The much vaunted PWC study and projections from 2014 points to large growth and many of its predictions are coming true as we see likes of AirBnB and its many spinoffs create value for home owners, seeing a huge change in availability. Scooters, Cycles and soon autonomous vehicles will all add to this shifting business model.
Whether 2019 portends more growth or difficulty for the sharing economy depends, but one thing is coming true faster than that of e-commerce taking off, the sharing economy is fast becoming just the economy.
Technology is powering the change and the ability for people to participate in this new economy and to switch from providing just a boost to their income, through letting a room, to becoming the way they earn all their income through a portfolio of work and investments that operate through several platforms.
This brings us to insurance and how insurance will change to reflect this new economy. Sharing economy insurance will become more responsive and event based - microinsurance policies will be used to provide insurance cover for events and processes. Today we see changes coming through innovative new insurance companies, but none so fast as in China where they recently posted 1.1 Billion policies in one day!
So maybe we are closer than you think to the sharing economy being The Economy.
At Microinsurance we are focused on changing the way business insurance is developed and processed. We are insurance with an API. We are in the forefront of that change; developing policies by the season, job, by the hour, by the day and by the Km, thus fitting our model to that of the platforms and the way small and micro businesses see risk. We are unbundling business policies so that the cover offered fits with peoples and business needs or the actual job or process being undertaken. Making Business Insurance transactional.
tags #parametrics #insurance #augmentedinsurance #sharingeconomy